Wal-Mart takes on Amazon with $50 unlimited shipping service

Wal-Mart Stores Inc. will test a new unlimited shipping service for online shoppers this summer that will be priced below Amazon Prime. The move underscores Wal-Mart's efforts to scale its online business rapidly and gain a share of a market dominated by Amazon.

By
Staff, Associated Press/Reuters /
May 14, 2015

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Signage outside a Wal-Mart store in Duarte, Calif. Wal-Mart will test a new unlimited shipping service for online shoppers this summer that will be priced below Amazon’s widely popular $99 per year Prime service.

Damian Dovarganes/AP/File

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New York

Wal-Mart Stores Inc. will test a new unlimited shipping service for online shoppers this summer that will be priced below Amazon's $99 per year Prime service.

Wal-Mart, the world's largest retailer, told The Associated Press on Wednesday that the shipping subscription service will cost customers $50 a year. Products will arrive in three days or less.

Wal-Mart offers a grocery delivery and pickup service in five markets. But the unlimited shipping program marks a substantial commitment and underscores how serious the retailer is about accelerating the growth of its online business, which has seen a slowdown.

Wal-Mart's service, which will be by invitation only for now, will offer selected products on the company's website to customers within three days or less, company spokesman Ravi Jariwala told Reuters. Wal-Mart offers more than 7 million products on its website.

"Depending on customer feedback we will see how the program evolves," Jariwala said.

The move underscores Wal-Mart's efforts to scale its online business rapidly and gain a share of a market dominated by Amazon.

Amazon's launched its $99-a-year shipping service called n Prime, a decade ago with the guarantee of standard, reliable two-day shipping on online orders.

Since then Prime has become the cornerstone of Amazon's growth and the e-commerce company said U.S. Prime memberships grew 50 percent last year.

The unlimited shipping service was first reported by The Information, a publication that covers the technology industry.

Ravi Jariwala, a company spokesman, said the offering is in response to increasing demands from customers who are looking for predictable and affordable shipping. It's also part of Wal-Mart's overall strategy to test new ways to serve customers who are increasingly researching and buying on their PCs or mobile devices and are looking for convenience.

Jariwala said the service will be available by invitation only for now and it will offer more than one million top-selling items, from toys to electronic gadgets. Wal-Mart's online site sells more than seven million products.

For now, he said the service would not offer features like free video and music streaming that Amazon provides. He said that customer feedback will direct how the program will evolve.